DHARAMPAL SATYAPAL LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Feeling distressed by the withdrawal of the fiscal incentive professed under the new industrial policy in the Northeastern Region embodied in the office memorandum No. EA/1/2/96-IPD dated 24.12.1997 of the Ministry of Industry and Commerce, Department of Industrial Policy and Promotion, Government of India by way of exemption of duty under the Central Excise Act, 1944 (for short hereafter referred to as the Act) for its manufactured items of "pan masala" and other tobacco products the Petitioner has mounted this assailment seeking invalidation of the impugned decision and restoration of the concession with all consequential benefits. By orders dated 9.3.2010, the operation of the impugned notifications 11/2007-CE dated 1.3.2007 and No. 21/2007-CE dated 25.4.2007 had been kept in abeyance.

(2.) The contentious pleadings dealt case wise lay the essential facts. The Petitioner in WP(C) 749/2010 has introduced itself to be a Company incorporated under the Companies Act, 1956 with its registered office at 1711, S.P. Mukherjee Marg, in New Delhi having fifteen units functional in the State of Assam out of which eight are exclusively engaged in the manufacture of pan masala. The Central Government in the Ministry of Industry and Commerce, Department of Industrial Policy and Promotion, in order to provide a fillip to industrial growth in the Northeastern Region through its Northeastern Industrial Policy conveyed by the office memorandum No. EA/1/2/96-IPD dated 24.12.1997 announced new initiatives and incentives amongst others by way of central excise and income tax exemptions on various excisable commodities/goods including pan masala for a period of 10 years from the date of commencement of commercial production thereof or the date of issuance of the notification whichever was later. Consequent upon the above declaration, the Central Government issued notifications No. 32/99-CE and 33/99-CE dated 8.7.1999 under the Act read with other legal provisions as mentioned therein in reiteration. Thereunder the Central Government exempted the specified goods from excise duty or additional excise duty with regard to the units located in certain areas/industrial estates etc. The exemption so granted was extended to new industrial units that had commenced their commercial production on or after 24.12.1997 as well as those that had existed before that date but had undertaken substantial expansion by way of increase in their installed capacity by not less than 25% on or after the said date.

(3.) According to the Petitioner, though it was initially hesitant to set up its units in the Northeastern Region due to logistical and locational problems as well as other difficulties, in view of the assurance of excise duty exemption for a period of 10 years, it decided to do so and thus set up manufacturing units within the areas specified in the aforementioned notifications. The commercial production in the fifteen units so established in the industrial estate, Bamunimaidam, Guwahati of which 8 were devoted to the manufacture of pan masala commenced in the years 2001, 2002, 2006 and 2007. In the process it has invested huge amounts generating as well substantial employment to the locals besides stimulating industrialisation in the Region. The Petitioner has claimed that its total investment in the projects as on 30.9.2009 is Rs. 90.65 crores. A chart has been furnished by it disclosing the details of investment in the pan masala units and the dates of commencement of commercial production in them. It has maintained that its investment in the pan masala units has been to the tune of Rs. 29.09 crores which employ about 400 persons. According to it, it has also entered into various agreements for carrying out the manufacturing process and has schemed several new ventures in the Northeastern Region acting on the commitment that the exemption would continue for a full term of 10 years as alluded in the notifications No(s) 32/99-CE and 33/99-CE. It having satisfied the eligibility criteria as mentioned in the North East Industrial Policy, 1997, (for short hereafter referred to as the Policy 1997) and being entitled, availed the benefit of exemption from payment of excise duty on the finished goods manufactured and cleared by it and was duly allowed the refund of such duty deposited by it since the year 2001 following the verification of its claims relatable thereto.